FULFILMENT - HOW DOES IT WORK AND WHAT IS THIS SERVICE?

Online shop owners do not always have their own warehouse. Managing and maintaining such space  is quite expensive and not always cost-effective. Some entrepreneurs - therefore - opt for outsourcing and outsource warehouse logistics tasks to an external company. One form of such cooperation is fulfillment. It involves the comprehensive handling of orders by an external operator in return for a set rate. How much fulfilment costs usually depends on the type of goods, the number of parcels sent and the scope of the offer.

What is usually included in the scope of services provided by those offering fulfillment to their clients? Above all, the logistical processes involved in running an online shop, and therefore the handling of orders, including the dispatch of goods and the handling of returns and complaints. The third-party operator also ensures that appropriate documentation is kept, such as receipts or invoices, and that it is factually correct. At the same time, it is still the owner of the online shop who owns the goods - it is up to him to produce or purchase them, and the external operator merely manages them as the principal wishes. For fulfilment to be possible, the trader must supply the goods to be handled within the warehouse.

Whether fulfilment turns out to be a hit or just an unnecessary expense depends on a number of factors. It is therefore worth pointing out some of the advantages and disadvantages of this solution. What can an e-commerce business gain from this model? With such a service, an online shop can, for example, focus on acquiring new customers and address business development in fields other than logistics. Not having to handle orders in-house is a major time and money saver for smaller, but popular, businesses, and is conducive to generating e-commerce profits. Many years of experience and the handling of orders from many online shops mean that logistics companies providing fulfilment services can offer low shipping costs.

There are, however, several more or less serious inconveniences associated with handling orders via an external operator. First and foremost is the need to pay a fee for this service - the amount of which can make the financial benefit small or non-existent. E-commerce companies that do not provide a fulfillment provider with a higher volume of orders may struggle to negotiate a cost-effective price list. Online shop operators who do not have their own warehouses, in the fulfilment model, often also have no way of accurately verifying the validity of complaints.

The advantage of fulfilment compared to running an in-house warehouse is that there are no costs associated with infrastructure investment. Provision of such a service by a specialised company is also an opportunity for competitive rates for a single shipment. Procurement by third-party operators does not require a commitment from the client companies, thus providing them with greater convenience, particularly noticeable if this partner also enables them to handle returns.

Dealing with complaints in online shops with their own warehouse, on the other hand, allows a better look at the goods that customers send back. Managing one's logistics processes also means being able to adapt them effectively to current conditions, such as the demands of a particular season. An in-house warehouse also makes it possible to take better care of the speed aspect of order fulfilment, which is very important in online sales - greater flexibility in terms of cooperation with courier companies will allow the optimal time and frequency of order collection.